Veterinary medicine is among the most unique careers in the world, with an incredible breadth and depth of knowledge shared among veterinarians. Over the course of a veterinarian’s career, he or she may learn about everything from alpaca anatomy to zoonoses like Zika. He or she will likely become a skillful problem solver, while also honing skills in marketing, organizational psychology, and business management. The latter can be one of the greatest challenges for veterinarians, particularly with private practice ownership. Very little formal training is available in a veterinarian’s initial education. Knowledge on how to run a business must be sought out by the individual. It is no wonder, then, that by the time he or she becomes familiar with the daily ins and outs of practice ownership, the veterinarian is often ready to transfer ownership to a successor in favor of retirement. That usually doesn’t provide stress relief, though, because transitioning ownership of one’s practice can be a source of immense stress, especially when there is no previously identified structure for a succession plan in the veterinary clinic. This paper aims to fill that knowledge gap, and lay out a pathway for practice owners to bring in partners who will, when time comes for retirement, be fully prepared to take over (Gage, 2004).
The path to partnership in veterinary medicine can be designed to resemble strategies already successfully employed by law firms. This paper will use a structure laid out by Nick Jarrett-Kerr as the basis for selecting and fostering a partnership in a veterinary setting; this structure is a five-step process used to promote partners within a firm (Jarrett-Kerr, 2011).
Step One: Define the ideal candidate
Before a veterinarian can begin fostering a mentor/mentee relationship with his or her future successor, this individual must first be identified. It is tempting to employ favoritism or use the concept of seniority when selecting someone to become one’s partner; however, the following characteristics are critical in selecting a partner who will continue to successfully manage one’s practice after retirement.
The ideal candidate must be a skillful veterinarian, with excellent communication skills and emotional intelligence. Additionally, a candidate for partner must be entrepreneurial, with relationship and practice management experience, a dependable leader who gets along with others in the practice. Finally, this person must employ tactful conflict management skills (Freedman, 2016).
Step Two: Assess critically important areas of performance (CAP)
There are many models available to borrow from other fields to assess the performance of a candidate, once the person who resembles the ideal image described in step one has been identified. An example of this is the Performance T. This model highlights important areas of performance in a sequential order (the “crossbar”), which depend upon the partner’s ability to contribute to the clinic from a technical aspect. In this case, the T model (see figure 1) would demonstrate the need for a potential partner to employ excellent client relationship management, have respect for the clinic and its role in the community, demonstrate financial and business acumen, effectively manage the clinic staff, and have a vision to continue developing the clinic’s business model. Each area rests upon the veterinarian’s ability to communicate effectively and provide superior medicine to patients.
Figure 1. The Performance T model adapted for veterinary medicine.
To effectively assess the candidate’s success in these areas, a list of competencies is beneficial. While the particular competencies will likely vary on a practice by practice basis, there are a number of examples available on the Partnership Profile Assessment (Table 1). The goal of these competencies is to define which skills the candidate must have in order to be successful in each of the CAPs.
Step Three: Define the criteria for measuring competence
To determine if a veterinarian’s potential successor meets the required competencies defined in step two, there must be clear criteria laid out for measuring competence. Criteria can be quantitative, such as hours worked, gross revenue generation, clients seen per day, or average client transactions. They may also be qualitative, such as contribution to the practice based on client or coworker feedback. There are also prospective measures, which consider the potential future impact of the candidate’s current investment such as CE attendance or marketing efforts, and finally surrogate measures such as the mentorship time invested in the candidate, which are expected to create a more qualified candidate, but such relationships cannot actually be proven. The particular criteria that are important to a veterinarian’s practice will vary on a case by case basis; however, it is critical that this system of metrics be constructed before the initiation of the partnership process to facilitate constructive discussions. This systematic approach also ensures that assessments are fair among individuals, in the event that multiple predecessors are being evaluated.
Step Four: Outline a thorough assessment process
Creating a method for putting the metrics together and assessing a candidate’s growth and potential is the last key feature in designing the pathway. A partner profile spreadsheet is a valuable tool to evaluate the various criteria in a relatively objective way. The veterinarian can complete the spreadsheet for each meeting (whether they be biannually, quarterly, or more frequent still) or put the onus on the candidate to “prove” competency by providing as many examples of criteria met as possible.
Step Five: Implement the program
The final step is the most vital, but also the most daunting, in the pathway to partnership. This step is where the veterinarian puts planning into practice. The first component of implementation is to identify candidate(s) who have the characteristics desired. It is advisable to begin this process five to ten years prior to the desired retirement age, as the perfect candidate may take some time to discover. At the time of hiring new associates, the veterinarian can inform them of the possibility for practice ownership, and lay out the characteristics being sought. If the associate is interested in entering the pathway, he or she must then meet a minimum qualification requirement that may include hours worked per week, a minimum gross revenue production, and/or a down payment savings plan. If the associate qualifies for the pathway after the first year of employment and expresses an interest, the veterinarian can formally invite this person to begin the progression as a partner candidate. The veterinarian will hold frequent and regular meetings with the candidate over the next three to five years to review performance and progress along the pathway. At these meetings, future plans can be discussed to ensure the candidate’s values are in line with those of the practice, and goals can be established to provide targets the candidate must meet along the way. The score-card and T model that the veterinarian has developed can be used at these meetings to evaluate which benchmarks the candidate is meeting, and where further efforts need to be focused in order to progress. Continual mentorship and counseling from the veterinarian will aid in the growth of the candidate into a suitable partner.
Once the candidate has been consistently meeting and exceeding the criteria laid out, the veterinarian should encourage the candidate to submit a written application for the position of partner. Depending on the needs of the practice, the veterinarian may also request a career plan from the candidate and an explanation of how that plan is beneficial for the practice. The veterinarian will interview the potential predecessor at length. Should the candidate pass through each of these checkpoints, the veterinarian will inform the candidate that the application for partner has been accepted. At this time, compensation must be negotiated.
Compensation of the associate initially will be the same as any other new veterinarian at a practice, and this again differs by case. As the associate prepares to become a partner in the business, though, additional training and responsibilities warrant additional compensation. This pay increase provides an incentive for the learning and dedication of the candidate. It will be tied to the overall performance of the clinic, motivating the candidate to keep the health of the clinic in mind at all times. The compensation model typically used in a veterinary practice is modeled after the eat-what-you-kill method typically seen in American law firms. This means that the majority of a veterinarian’s compensation (associate or partner) will be based on productivity. As more management-oriented goals are assigned to the candidate, however, bonuses may be awarded for meeting or exceeding these goals. Once the candidate becomes a partner, he or she will be entitled to a portion of the profit from the practice, as well.
When that time comes for the candidate to buy into the practice, the veterinarian may consider offering shares at a discount. At this time, it is critical to discuss the veterinarian’s retirement plans. This includes the time at which the new partner will fully buy out the veterinarian, as well as the role the retired veterinarian will take in the practice from that time forward.
Fostering your mentee/partner
In order to foster a relationship with a future partner, a veterinarian must invest significant time into mentoring him or her along the pathway to partnership. It is essential that the veterinarian is clear about intentions with each associate employed and avoids raising false hopes of ownership in associates that he or she does not intend to invest time in. Likewise, criteria for partnership selection must be clear and rigorous, to avoid the perception (or reality) of favoritism.
It is not unusual for the mentee to become well liked by clients of the practice. The goal of fostering a successful future owner mandates such an occurrence. Human nature sometime causes the mentor to become jealous, unfortunately, of client preference for the “newer model.” Such jealousy must be mitigated by honest communication. The mentee and mentor ought to have a level of candor between them that allows free flowing conversations, in order to maintain a healthy relationship that will continue to nurture the mentee (Krames, 2005).
The mentee and his mentor must commit to one other. They must both invest in the program, to the practice, and to a common vision for future growth.
The transition
There are really two transition periods in the succession process. The first is transitioning an associate to part owner of the practice. This process is facilitated through the five-step pathway program. The second involves transitioning ownership completely, so that the original owner may retire. It is critical that the veterinarian presents the transfer of ownership to the staff in a way that is positive, and keeps everyone in the loop to help ensure there are no sour feelings among staff. There needs to be dialogue concerning the role of the retired veterinarian, as that individual contributes to the practice culture in a significant way. The new owner may choose to make changes to the culture, staff, or quality of medicine that the former owner disagrees with. The conversation about boundaries must be had ahead of time, so that the new owner’s authority does not become undermined.
Pitfalls (and how to prevent them)
There are a number of pitfalls that veterinarians may succumb to in the process of fostering a successor or transferring ownership of the practice. To ensure a smooth transition, care must be taken to prevent occurrence of potential issues, most of which occur if the veterinarian did not communicate clear expectations or did not adhere to a predetermined timeline. This often results in delayed retirement on the part of the veterinarian, whether that is due to an unwillingness to say goodbye or a poor economy making it financially difficult for retirement to happen. Each of these delays can breed resentment on the part of the mentee, because of career stagnation or the perception or reality of false promises being made.
Sometimes, a frustrated mentee will seek new opportunities to become an owner, and this leaves the veterinarian without a suitable successor. Conversely, the mentee may get cold feet on the deal, or begin to feel incapable of taking on the amount of responsibility expected (Freedman, 2014). The key to preventing these issues from becoming disasters is to ensure that both parties are aware of the timeline of succession, and that both parties commit that timeline. Ongoing open communication is vital. Finally, flexibility on both sides is needed, as plans sometimes need modified. As long as everyone is committed to the growth of the practice, these issues can usually be worked through and the associate can continue on his or her pathway to partnership.
References
Freedman, E. (2014). Failed Promises, Failed Plans. In (pp. 5). Pennsylvania Bar News.
Freedman, E. (2016). For New Managing Partners. In (pp. 4). Pennsylvania Bar News.
Gage, D. (2004). The partnership charter : how to start out right with your new business partnership (or fix the one you’re in). New York: Basic Books.
Jarrett-Kerr. (2011). Criteria and Guidelines for the Promotion and Admission of Equity Partners. In. Managing Partner Forum: The Remson Group.
Krames, J. A. (2005). Jack Welch and the 4E’s of leadership : how to put GE’s leadership formula to work in your organization (1st ed.). New York: McGraw-Hill.
